TMI Blog1994 (11) TMI 179X X X X Extracts X X X X X X X X Extracts X X X X ..... nth from its sister concern, namely, Universal Marble Industries (P) Ltd. These charges were for rendering administrative and other assistance and also for use of common facilities like telephone, electricity and water, free furnishing of air-conditioned office premises and photostat, etc. The concerned office is located at 28, Prithvi Raj Road,New Delhi. These administrative charges were duly accounted for as an income for the respective assessment year. As on1st July, 1982, the account of M/s. Universal Marble Industries (P) Ltd. in the books of the assessee reflected an amount of Rs. 3,75,000 recoverable from it. On30th June, 1983, this increased to Rs. 8,40,000. As on1st July, 1984, the assessee had to recover Rs. 9,75,500 from the sist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter concern, reliance was placed on the decision of the Calcutta High Court in the case of CIT vs. Gillanders Arbuthnot Co. Ltd. (1981) 24 CTR (Cal) 339 : (1982) 138 ITR 763 (Cal). The learned Authorised Representative on the other hand supporting the orders of the Revenue authorities argued that it was not proved that the amount had become bad in the year under consideration and as such was allowable. 3. We have considered the rival submissions. On the facts as placed before us, we find that all along the line the assessee's argument was that as M/s. Universal Marble Industries (P) Ltd. suffered heavy and continued losses, the charges were not recoverable. There was also no formal agreement between the assessee-company and M/s. Univers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed loans to its subsidiary from time to time. There was a running account between the assessee-company and the subsidiary on account of which there was a debit balance of Rs. 87,546 which was written off by the assessee during the relevant assessment year. It was found as a fact that the subsidiary company went into liquidation and the liquidator wrote to the assessee-company that there was absolutely no chance of effecting any recovery. It was on these facts that the amount was held to be a trading loss and allowable. In the case of the assessee no evidence was rendered to show that the amount had become irrecoverable and as such was rightly written off as a bad debt. Rather the arguments of the learned Authorised Representative that at le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... east should be allowed. 6. We have considered the rival submissions. We find that the total expenses shown at Rs. 24,656 mostly relate to Five Star hotels as well the Dinners club,India. They are mostly on directors of the company. A small amount of expenses could only be attributable to the employees of the company. Accordingly, out of the total expenses of Rs. 24,650, 10 per cent would be attributed to the employees participation in these expenses to which extent the relief is allowable. As regards a sum of Rs. 6,725, as it was not shown that the expenses were not allowable, no disallowance was called for. In the circumstances, the assessee is allowed relief of Rs. 9,190 (Rs. 2,466+6,725). 7. The final ground of appeal relates to disa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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